The HECM reverse mortgage is an FHA-insured mortgage program designed to give seniors access to a large portion of the value of their home without having to take on a mortgage payment or give up ownership of the home. The reverse mortgage is a home loan, so it does come with some basic eligibility requirements:
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- You must be 62 or older. For married couples, only one individual needs to be at least 62 years of age or older. The younger spouse can qualify as a non-borrowing spouse, which offers all the protections of the reverse mortgage in the event the older spouse passes away.
- You must own your own home. Eligible properties include single-family homes, FHA-approved condos (the FHA-approved condo website can be found here), duplexes, triplexes, fourplexes, and mobile homes that meet FHA guidelines. Buildings with five units or more are not eligible.
- Your home must be your primary residence. Second homes and investment properties are not allowed.
- You must meet certain residual income and credit requirements. The HECM reverse mortgage used to have very limited credit and income qualifying, but in April 2015 FHA changed the guidelines to be much more stringent. A reverse mortgage is still much easier to qualify for than a traditional home loan in many ways, but your income and credit history will need to meet certain basic guidelines for you to qualify. If you have adequate income to cover the majority of your monthly expenses and you have a reasonably decent credit history, chances are you’ll be eligible. Even if you don’t lenders do have some flexibility with guidelines and may still be able to make a reverse mortgage work for you.
If you’re 62 years of age or older (or you’re married to somebody who is) and you own your home and live in it as your primary residence, and you have a reasonably good history of paying your bills, it’s a good bet you’re eligible for the program.